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Ramalingam

Ramalingam Kalirajan  |9752 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 27, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - May 27, 2024Hindi
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Hi sir i am 50 years old and i am selling a property for 3 crores and its guidance value is only 70 lakhs this is the amount which i can get registered but i wanted to keep whole money of 3 crores as fixed deposit and need monthly interest so please let me know how can i do this

Ans: Evaluating Your Situation
You are selling a property for Rs 3 crores, but its guidance value is only Rs 70 lakhs. This means the registration will reflect the lower value.

You wish to keep the entire Rs 3 crores in a fixed deposit (FD) and earn monthly interest. This is a conservative and secure approach to managing your funds.

Understanding Capital Gains Tax Implications
Selling a property for a value higher than its guidance value has tax implications. The difference between the sale price and the guidance value is considered capital gains.

Capital gains tax can significantly impact your net proceeds. It’s essential to plan for this tax liability before making any investments.

Planning Your Fixed Deposit Investment
A fixed deposit is a low-risk investment option. It provides regular interest income, which can support your monthly expenses.

Fixed deposits in reputable banks are secure, but interest rates can vary. Compare rates across banks to find the best option.

Generating Monthly Interest Income
Interest from fixed deposits can be received monthly, quarterly, or annually. For regular monthly income, opt for a monthly interest payout.

Calculate the interest income based on the prevailing FD rates. Ensure it meets your monthly expense needs.

Advantages of Fixed Deposits
Fixed deposits offer capital protection and guaranteed returns. They are easy to manage and provide a stable income.

There is no market risk involved, making them suitable for conservative investors.

Disadvantages of Fixed Deposits
Fixed deposits generally offer lower returns compared to other investment options. Inflation can erode the real value of returns over time.

Early withdrawal penalties can also reduce your effective returns if you need to access the funds before maturity.

Diversifying Your Investment Portfolio
While fixed deposits are secure, consider diversifying your portfolio. This helps manage risk and potentially increases returns.

Actively managed mutual funds can offer better risk-adjusted returns. They are managed by professionals who can navigate market volatility.

Benefits of Actively Managed Funds
Actively managed funds can provide higher returns by making strategic investment decisions. They adjust the portfolio based on market conditions.

These funds can offer a good balance between risk and return, suitable for long-term growth.

Regularly Reviewing and Adjusting Investments
Monitor your investments regularly to ensure they align with your goals. Adjust the portfolio as needed based on performance and changing needs.

Regular reviews help keep your investments on track and make timely adjustments.

Consulting a Certified Financial Planner
A Certified Financial Planner (CFP) can provide expert advice and help you create a comprehensive financial plan. They can guide you on tax planning, investment diversification, and achieving your financial goals.

CFPs offer personalized advice, ensuring your investment strategy aligns with your risk tolerance and objectives.

Creating a Comprehensive Financial Plan
A detailed financial plan should cover all aspects of your financial life, including tax planning, investment strategy, and retirement planning.

Ensure the plan is flexible to adapt to changing circumstances and financial goals.

Conclusion
Your conservative approach to investing in fixed deposits is understandable. To optimize your strategy:

Plan for capital gains tax implications.
Compare FD rates to maximize interest income.
Consider diversifying your portfolio with actively managed funds.
Regularly review and adjust your investments.
Consult a CFP for personalized financial planning.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |9752 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 02, 2024

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I WANT TO KEEP MONEY IN FIXED DEPOSIT OF SRIRAM FINANCE LTD
Ans: Investing in a fixed deposit (FD) can be a wise choice, especially if you're looking for a safe and stable return on your investment. Shriram Finance Ltd. offers attractive interest rates on their fixed deposits, which might be why you're considering this option.

Let's go through some important points to consider before making this decision.

Safety and Security
Credit Rating:

Check the credit rating of Shriram Finance Ltd. before investing.
Higher-rated FDs are safer as they have a lower risk of default.
Regulatory Framework:

Shriram Finance Ltd. operates under the regulations of the Reserve Bank of India (RBI).
This adds a layer of security, but it’s still essential to review their financial stability.
Interest Rates and Tenure
Competitive Interest Rates:

Shriram Finance often provides competitive interest rates, higher than many bank FDs.
Higher rates can lead to better returns, but ensure the difference is significant enough to justify choosing them over traditional banks.
Tenure Options:

You can choose from various tenure options, typically ranging from 1 to 5 years.
Align the tenure with your financial goals. For instance, if you need liquidity within 3 years, opt for a shorter tenure.
Liquidity and Premature Withdrawal
Lock-in Period:

Fixed deposits usually have a lock-in period. If you withdraw before maturity, you may incur penalties.
Ensure you won’t need the funds urgently before the FD matures.
Premature Withdrawal:

Understand the terms of premature withdrawal, including penalties and reduced interest rates.
This feature is essential if you might need the funds before the FD's maturity.
Benefits of Shriram Finance Fixed Deposits
Cumulative and Non-Cumulative Options:

Choose between cumulative (interest is compounded and paid at maturity) or non-cumulative (interest paid periodically) options.
Select the option that best suits your financial needs. Non-cumulative FDs can provide regular income, while cumulative FDs are better for long-term growth.
Higher Interest Rates for Senior Citizens:

Shriram Finance typically offers higher interest rates for senior citizens.
If you or your spouse is a senior citizen, this can be a great advantage.
Tax Implications
Tax Deducted at Source (TDS):

Interest earned on FDs is taxable. If the interest exceeds Rs. 40,000 in a financial year, TDS will be deducted.
You can submit Form 15G/H if you're eligible to avoid TDS deduction.
Taxable Income:

Include the interest income from the FD in your annual tax returns.
Consider your tax slab while investing, as the post-tax returns might be lower than expected.
Risk Considerations
Company Risk:

Unlike bank FDs, which are insured up to Rs. 5 lakhs, corporate FDs like those offered by Shriram Finance carry more risk.
Assess whether the slightly higher interest rate compensates for this increased risk.
Market Conditions:

Keep in mind that economic downturns can affect the financial health of non-banking financial companies (NBFCs) like Shriram Finance.
Stay informed about the company’s financial performance.
Diversification Strategy
Avoid Concentration Risk:

Don’t invest all your money in a single FD or with one company.
Diversify your investments across different asset classes and financial institutions to minimize risk.
Consider a Bouquet of FDs:

If you decide to invest with Shriram Finance, consider splitting the amount across multiple FDs with different tenures.
This strategy can help manage liquidity needs and interest rate risks.
Final Insights
Investing in a fixed deposit with Shriram Finance Ltd. can be a good option if you seek higher interest rates and are comfortable with the associated risks. However, always assess your risk tolerance and liquidity needs before committing. Diversify your investments and stay informed about the financial health of the institution.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9752 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 21, 2025

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I have received Rs 56 lac fixed deposit redemption after my father death. I want to use the about to buy house.It may take 6 month to 1 year. Meantime please advise me how to invest the money for short period of 6 month to 1 year.
Ans: . First of all, receiving Rs.?56 lakhs from your father’s fixed deposit is a significant financial event. You’re making a thoughtful move by not rushing into the property decision. Keeping the funds safe till you finalise your home purchase is very wise.

Let’s now understand how you can manage this amount well for the short term.

Emotional Stability First, Then Financial Action

This money carries emotional value too

Decisions should respect both heart and logic

Take time to grieve and settle emotions

Only then, act thoughtfully on this corpus

Avoid rushing into quick investments

This balance helps protect your peace and your capital.

Time Frame of Investment Clearly Stated

You want to buy a house

Likely in 6 months to 1 year

This is a short-term investment window

In short-term, safety is priority

Not returns, but capital preservation comes first

So, your investment should be low-risk and highly liquid.

Avoid High Risk Options Immediately

No equity funds, not even balanced funds

No options, futures, or direct equity

Avoid index funds—they follow the market without downside protection

Actively managed debt funds offer safer management

Avoid investing in direct funds on your own

Without expert support, decisions can go wrong

You don’t need volatility or uncertainty now.

Purpose of This Investment Must Guide Decision

This money is meant for home

Don’t mix it with other goals

Don’t lend this amount to anyone

Don’t lock it in long-term instruments

Don’t take tax-saving investment decisions here

Focus only on preservation and quick access

A clear purpose gives your investment direction and boundary.

Options for Parking the Funds Safely

Here are suitable low-risk, short-term options:

Ultra short-term debt funds

Suitable for 3 to 12 months

Low risk and better returns than savings

Very low volatility

Ideal if you need liquidity after 6 months

Low-duration mutual funds

Slightly better returns than FDs

Good for capital safety

Invest through regular plan via Certified Financial Planner

Liquid mutual funds

Extremely safe

Suitable for 1 to 6 months

Withdrawals processed in 24 hours

Useful if house booking is expected anytime soon

Bank fixed deposits (short term)

For very conservative part of capital

Park in 3–6 month FD

Stagger multiple FDs to break when needed

Sweep-in accounts or auto FD

Offers liquidity like savings

Gives FD-like returns on idle balances

Not ideal for large amounts

Use only for Rs.?2–5 lakhs portion

Keep mix simple, safe, and liquid.

How to Allocate the Rs.?56 Lakhs Properly

Here is a structured approach:

Rs.?20 lakhs – ultra short-term fund

Rs.?20 lakhs – low duration fund

Rs.?10 lakhs – liquid fund

Rs.?6 lakhs – bank FDs (staggered in 3 parts)

This gives you safety, liquidity, and mild returns

Revisit every 2 months with your CFP for adjustments.

Taxation Considerations

These are all debt instruments

If held less than 3 years, taxed per your slab

So, if you're in 20% tax slab, gains are taxed at 20%

No need to worry about long-term capital gain rules

Short-term funds offer better liquidity with taxable income

Withdraw only what is required, to avoid extra tax.

Maintain Separate Account for This Goal

Open a new savings account for home investment

Track only this Rs.?56 lakhs from that account

Don’t mix it with salary or daily expenses

Use the account for only home-related payments

This helps manage transactions better and avoid misuse.

Create a Digital Folder for Property Planning

Start researching properties passively

Make a folder for property papers, notes, contacts

Also track the movement of this Rs.?56 lakhs

Maintain basic Excel or written log

Record every transaction and interest earned

This gives you financial discipline and awareness.

Avoid Emotional Decisions and Peer Pressure

Don’t rush because relatives or friends push you

Don’t invest just because someone else did

Don’t go for real estate investments now unless house is finalised

House is a personal choice, not just an investment

Keep your vision and purpose clear.

Regular Review Every Month

Monitor your funds monthly

Check liquid fund NAV, returns

Track fund performance via MFD or CFP

Don’t keep all money in one place

Split between mutual funds and short FDs

Rebalancing is not needed here. But tracking is still essential.

Don’t Use This Corpus for Other Goals

Not for business

Not for education

Not for long-term SIPs

Not for gifting or lending

Keep this amount 100% focused on house purchase.

Liquidity is Non-Negotiable

Your investment must allow exit within 1–2 days

Emergency situations might arise

All selected products should be easily withdrawable

That’s why liquid and short-term funds fit best

This ensures money is ready when you need it.

Role of a Certified Financial Planner (CFP)

Choose regular mutual fund plans through CFP

Direct funds lack expert monitoring

CFP tracks market events and manages risks

Offers human touch and strategic rebalancing

Helps you remain calm during rate fluctuations

For short-term planning, this guidance is vital.

Future House Purchase Planning Tips

When ready to purchase, shift liquid funds gradually

Pay token amount from liquid fund

Move rest step-by-step during registration

Maintain Rs.?5–10 lakhs till last stage for surprises

Avoid locking full amount in builder advance

You stay in control by releasing money in steps.

If Delay Happens Beyond 1 Year

If house booking delays beyond 1 year

Shift from liquid funds to corporate bond or medium-duration fund

But only if 100% confident about extended timeline

Reconfirm with CFP before this shift

Flexibility should match your actual plan updates.

Finally

You have received a large amount from your father’s savings.
It’s a responsibility and an opportunity.
You are already doing the right thing by not rushing into property.
Short-term investment needs very safe, liquid and low-risk options.
Your Rs.?56 lakhs should be protected with care until home is finalised.
Use ultra short-term, liquid funds, and low-duration funds wisely.
Avoid equity, index funds, and direct market exposure now.
Invest only through regular plans with CFP to preserve capital.
Use the right mix of bank and mutual fund products for liquidity.
Once home is finalised, funds are easily moved to purchase.
Your plan is clear, smart, and already in the right direction.
Just stay focused, review monthly, and take action slowly with clarity.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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